Wednesday, December 15, 2010

If you're starting a new company and wondering what your founding team should look like, you have several options.

The all engineering team

The all MBA team

The 50/50 Team

The 1:2 Team

Going Solo

Which option you choose is highly dependent on what you plan to build, whether or not you've started a company before, or if you even have the luxury of choosing (I think personality fit is by far the most important deciding factor, but that's for another post).

The all engineering team

Engineering should always be the focus and core competency of your team. It sounds obvious, but your company exists in order to build a good product. Great marketing and sales will get you in the door, but without great engineers, your company will wither and die. That said, an all engineering team lacks the marketing and sales that get you in the door, especially for an enterprise software company.

The all MBA team

If you don't have an engineer in your founding team, your chance of success drops significantly. This is the reason why so many VCs and angels have publicly stated that they avoid investing in non-technical founding teams.

The 50/50 team

50% engineering, 50% non-engineering. Make sure that the non-engineer on the team is a product manager that can also do sales, not the other way around. Most teams that fall into this category in my experience end up with an overworked engineer and an underworked product manager, which means you'll be raising money early to hire more engineers and getting diluted at sub-optimal terms.

The 1:2 Team

2 engineers, 1 product manager. In my experience, this is by far the best combination. The work load is distributed evenly for the early stages of the company and you can quickly build a prototype and get traction in order to raise money on favorable terms. Above is a venn diagram of the ideal skills and overlap of what I think is the perfect founding team. That said, for a consumer internet company that doesn't need sales, the product manager might end up being under-worked. This worked great for my company, but we do enterprise software.

Going Solo

If you're a 3-time successful entrepreneur with VCs clamoring to give you money at astronomical valuations without an idea, then this might be an option for you. Otherwise, this option is a death sentence.